What are the differences between incorporation documents prepared by top Silicon Valley law firms and law firms elsewhere in the United States?

The cover letter for the documents has a Palo Alto address on their ivory 25% cotton linen 20 lb. bond paper letterhead with custom firm watermark.

In all seriousness, the firms in SV (and NYC area as well) are generally going to be more experienced and connected to deal with the specific issues faced by start-ups, tech companies, and VC funded companies, just to name a few.  You don't have to be a lawyer to get the articles of incorporation from the secretary of state's website and pay the filing fee, but the experience in knowing what other advice to give or other documents that need to be prepared, or at least planned for, for your specific industry, stage of growth, and other fact specific situations is not something you can learn through Quora, the secretary of state, or a general law firm that provides formation/incorporation services.  Start-ups deal with all different legal issues such as federal and state intellectual property law, securities law, general corporate law, contracts, finance, asset protection, exit planning, officer/director protections, shareholder issues, and capitalization structuring for future growth/capital raises.

If you are just a mom and pop grocery store with 1 small store and no plans to raise money, grow, or be acquired, you may not need a specialized firm in SV to incorporate (although the firm you hire should still go over things like buy-sell agreements, succession planning, asset protection, and required corporate procedures or best practices).  However, if you are on Quora asking this question, you are probably in the category that could use a specialized start-up type firm.  The majority are located or at least have an office in SV and/or NYC (or surrounding communities/states), but there are certainly all kinds of qualified firms/lawyers that also have the experience that may be needed. 

Be an educated consumer and learn what you may need to be sure whoever you hire has experience in those specific areas.  If they don't ask detailed questions about your business and future plans with recommendations based upon your answers, they probably don't have the experience you may need.

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Private Placement Memorandum (PPM) Templates- Why To Beware Most DIY, Discount or Free Forms

A common issue faced by entrepreneurs, founders, start-ups, and other small businesses is how to get documents when they need to raise money for their venture or enter into various agreements, hire employees, or protect their intellectual property.  The cash strapped individuals often look to discount or free services online to help them do things like obtain sample templates, incorporate, or get other form documents they can use.  There are definitely times you can use these sample form templates or online services and there is a link to some document / forms websites, term sheet resources, and sample financing documents on my Top Startup Resources page.  There are private placement memorandum (commonly referred to as PPM) templates online that can give a starting point and I go over what a PPM is, why you need one, and what should be in one on this page.

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What are the life skills a startup CEO must learn to rise to the top?

There are tons of business skills, but life skills translate into good decision making (not always, but most of the time).  Gratitude, humility, and ability to listen (as mentioned) are key, but the ability to take life as it comes and be accepting of those changes, but willing to adapt to survive.  Many CEOs are so convinced in their product/service, that they fail to see the big picture of life and business, which I feel should include acceptance of today, gratitude for tomorrow and doing what you love, and willingness to change, no matter what.

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What should I look for when signing an employee contract with a startup?

Critical to determine who owns what and to be sure that IP is protected.  That is where the EPIIA agreement discussed is useful.  There are other documents related to technology assignment that may need to be considered as well, but defining what IP is owned by who, who will own it in the future, and who owns the rights to derivative works (things developed that may be based on one person’s IP).

You can use standard forms, but the advice that goes along with forms and suggestions and strategies for protection can be worth the expense of an attorney.

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Is the traditional VC model broken?

Chris Barsness,

startup, finance, law, and tech nerd

Not broken, just needs to constantly adapt and change just like the start-ups and entrepreneurs they invest in.

Just as in any of the areas of finance, over time there are winners and losers for their return.  At the end of the day, it all comes down to all kinds of market forces, the economy, and what their LPs want.

Venture investing is a high risk and potentially high reward model.  There will continue to be changes necessary and challenges due to market forces (crowdfunding, online forums like AngelList, allowance of general advertising for certain fund raising under Reg D, etc.). 

At the end of the day, venture capital is a useful tool and is a necessary for the type of high risk investing used to start cutting edge new companies.

More on my take on the use and necessity at "Why Venture Capital is not Vulture Capital." 


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